The Institute of Professional Auctioneers & Valuers (IPAV ) says the new affordable homes initiative can make a difference, but will be over-subscribed given its attractiveness and the ever increasing demand for housing.
Commenting on Minister for Housing, Eoghan Murphy’s announcement earlier this week, Pat Davitt, IPAV chief executive, said the scheme is a most welcome move.
“This is the kind of initiative we’ve been seeking for some time,” he said. “And it’s positive that it will be available immediately and for new or second-hand homes. However, it’s difficult to understand why such a good scheme is being confined to those who have had two refusals of mortgage from two lending institutions. Many who want to get onto the property ladder do not apply to lenders when they know they cannot meet the current criteria.”
Mr Davitt said the lack of housing stock is still a major impediment in the market and issues such as the cost of construction remain to be resolved.
Pointing to the October budget, which promised a new €750 million Home Building Finance Ireland (HBFI ) scheme, he said: “That has the potential to make a difference if it ensures low cost loans go to SME builders throughout the country, but we haven’t heard much about the scheme since the budget. Post budget, it emerged that these loans could be at interest rates of as high as eight per cent.
“If today’s affordable homes initiative can provide loans at two per cent to 2.25 per cent, it is difficult to see why a similar rate, rather than the rumoured eight per cent interest rate, could not apply to this scheme also.”
Mr Davitt said the long-term fixed interest rate for periods of 25 to 30 years in today’s affordable homes initiative was “ground breaking” for the Irish market, something that IPAV has, for several years, been calling upon the Government to make available in Ireland, as it is in many European countries.